Planet gives up on NSW coal seam gas

Although protests against coal seam gas extraction in NSW have gained plenty of attention, Planet Gas on Tuesday referred only obliquely to the regulatory risk for its decision to exit the state.
Photo: Simon Bennett

Junior explorer
Planet Gas
has become the latest company to give up on coal seam gas in NSW amid a crackdown on CSG activities in the state, which has already driven away two other explorers.

The NSW government is introducing no-go zones for coal seam gas at horse breeding studs and vineyards, and 2 kilometre buffer zones around residential areas. The new restrictions have been roundly criticised by the industry, which says they have no scientific basis and will only worsen the risk of gas supply shortages and price increases.

The tougher rules were introduced only about six months after the NSW government released a strategic land use policy that was to guide CSG activities in the state. Both
Metgasco
and
Dart Energy
have also exited or frozen their CSG activities in NSW, citing the unfavourable regulatory environment.

Much larger players
AGL Energy
and
Santos
have also attacked the new rules, although they are continuing with at least some if not all of their CSG development activities.

Planet Gas on Tuesday referred only obliquely to the regulatory risk in NSW for its decision to exit the state.

“Although New South Wales holds substantial CSG potential, the current environment does not fit with the company’s objectives being primarily focused on the Cooper Basin in South Australia," managing director
Anthony McClure
said in a statement.

Planet had agreed to spend between $15 and $20 million in a farm-in agreement with private company Leichhardt Resources to develop Leichhardt’s three NSW tenements in the Sydney and Gunnedah Basins and earn a 50 per cent stake.

“By mutual agreement, Planet Gas and Leichhardt have agreed the exit from each farm-in agreement and Planet Gas will retain no residual interest or liability," the company said.